Wednesday, March 21, 2012

I’ve had the opportunity to consider New Democratic Party leadership contender Thomas Mulcair’s article, “Tar Sands: Dirty Oil and the Future of a Country” published online in Policy Options Magazine. It’s an excellent article by Mulcair, who was Quebec’s Environment Minister prior to resigning from the provincial Liberal Party and running federally for the NDP in the Montreal riding of Outremount. It’s clear that Mulcair understands the need of putting sustainability at the head of decision-making processes. And Mulcair is right to point out that under the current Conservative government, Canada has taken significant steps backwards in its responsibilities to be stewards of the environment.

I’m impressed that Mulcair refers to that area of northern Alberta where bitumen extraction occurs as the “tar sands”, rather than the industry-rebranded “oil sands”, a term which seems to have caught on in the mainstream media. As a result, the use of the term “tar sands” almost invariably radicalizes the term user, despite the historical nature of the term (and frankly, despite being scientifically more correct). Good for Mulcair to call a duck a dirty duck, and to potentially endure the negative political consequences for doing so, especially since Mulcair has gone to great lengths to present himself to Canada as a moderate. Or at least a moderate within the context of the New Democratic Party.

Cynics might suggest that Mulcair is simply trying to demonstrate that he also has within him some radical street cred when it comes to the tar sands. Of course, those same critics may be disappointed that Mulcair hasn’t called for resource extraction in the tar sands to be closed down, in an effort to mitigate the consequences of the climate crisis. Even most those who hold the view that we would be better off to shut down the tar sands recognize that it would be politically suicidal to call for an end to bitumen extraction, and they might want to look at Mulcair’s stated approach of sustainable tar sands development as a good starting point in a conversation to curb extraction.

Actually, Mulcair says nothing of the sort. Let’s be clear here: Mulcair continues to argue that the tar sands will play an important role in Canada’s economy, and development there should proceed, albeit in a much more sustainable fashion, and without taxpayer subsidies for multi-national industries. This approach could be considered a “kinder, gentler” form of development. It’s also a smarter one, and I personally agree with Thomas Mulcair that we need to internalize the complete range of costs when we consider tar sands development.

Sustainable Development

Of course, I’m a Green, and none of this is really surprising (except perhaps to non-Greens, who believe that the Green Party wants to shut down the tar sands and indeed any polluting industry). And as a Green, I welcome Thomas Mulcair’s call for a significantly different approach to tar sands development. I suspect that the majority of those currently contending to become the Leader of the NDP are also onside regarding sustainable development. Jack Layton certainly talked about the tar sands in this manner, too, although perhaps not as poignantly.

The fact is, I think that a majority of Canadians are uncomfortable with the pace of tar sands development, and the breaks our government is giving to multinational industries. Canadians are becoming aware that the Harper Conservatives have declared war on the environment by rewriting environmental laws to better suit multinational industry needs, and tarring environmentalists as foreign subversives. The Conservative’s campaign to brand anyone concerned about environmental health as being “un-Canadian” is, in my opinion, sure to backfire. Equating the expression of environmental concerns with economic warfare being waged against the so-called interests of Canada is certainly creating a lot of unease across the country.

Mulcair’s vision for sustainable tar sands development is far from radical, however, and those considering lending him their vote to become the NDP’s next leader based on Mulcair’s green street-cred should take a closer look. Indeed, if most Canadians are uncomfortable with the runaway pace of tar sands development, and would like to see a greater emphasis on social and environmental priorities (not to mention looking after Canada’s long term economic interests through responsible development, rather than getting as much of the resource out of the ground as quickly and cheaply as possible, which seems to be the Conservative’s preferred “economic” strategy), is Mulcair a leading thinker on this issue, or just the latest follower? Again, leader, follower, whatever, at least Mulcair’s onboard, and that’s important. But it’s not the only thing which is important.

Radical or Run-of-the-Mill?

Mulcair’s article seems to be missing some critical policy pieces regarding how he and the NDP might change the development outcomes of the tar sands. Instead of a fulsome discussion, Mulcair falls back onto NDP-member approved policies: the elimination of federal subsidies for multinational oil companies (also known as “corporate welfare”, although Mulcair doesn’t use that term); ending public investment in research into unproven carbon capture and storage technology (which will only lead to further resource extraction, given that the new technology to store carbon dioxide is also intended to use the stored product to extract every last ounce of bitumen); and, of course, the NDP’s carbon-pricing baby, the Cap & Trade emissions trading scheme. All three have been on the NDP’s policy books for years, and the first two are even good ideas.

Beyond these, Mulcair offers very little when it comes to anything akin to a strategy to better manage resource extraction in the tar sands in a sustainable way. In other words, he’s long on good intentions, but very short on follow-through. Which, in my books, doesn’t say much, aside from what I’ve already said: thanks for coming out, glad you can bat for our team. To continue with the baseball analogy, it’s good that Mulcair might be a skilled right-fielder, but I wouldn’t want him acting as the First Base Coach or the Manager. Yet he aspires to a leadership position.

So, really, Mulcair hasn’t said anything much new here at all, other than to publicly call a dirty duck a dirty duck, and maybe rankle the feathers of those who want to keep branding him a Liberal in an orange sweater.

There is nothing bold about Mulcair’s tar sands policy. There’s no mention of where the resource which he wants to see sustainably developed might go. Even Alberta’s ultra-right-wing Wildrose Party has sensibly suggested that maybe it’s time to look to oil exportation to Eastern Canada, rather than the U.S. or China, given that we here in the East continue to rely on foreign oil exports for our own needs (and are subject to price fluctuations as a result). That kind of policy discussion would probably go over well in Quebec, which I understand is a province which the NDP wants to be seen as a champion.

Why not talk up the need for establishing a national strategic reserve, given that Canada is the only G-8 nation without one? Or better yet, why not couch an argument in favour of sustainable development as part of a much larger discussion about the need for a national energy strategy, one which favours low-carbon renewables and conservation? Really, those are the sorts of no-brainer policy options I would have expected to see from Mulcair in his Policy Options piece. But they’re not there.

Cap & Trade: The Wrong Way to Price Carbon

However, there is a lot to be concerned about with one of the NDP-approved policy proposals which Mulcair wants to continue to push: the Cap & Trade emissions trading scheme. In the Policy Options Magazine article, Mulcair says that a Cap & Trade program will better than a series of regulations (which has been the Conservatives approach to “managing” carbon emissions). In that, Mulcair is absolutely correct; Cap & Trade would certainly be better for industry and for Canada than what the regulatory hurdles the Conservatives are throwing up for businesses. But Mulcair fails to mention that a third generally-acknowledged approach to emissions management exists, and that it’s the only one which has actually been proven to reduce emissions: a revenue neutral carbon tax.

The NDP’s Cap & Trade program, if ever implemented, would be very problematic for many Canadians, including much of the NDP’s traditional core-supporters: working families. What Cap & Trade will do is essentially increase the price of many essential goods and services. Proving that Mulcair can pitch the NDP’s talking points as well as any, Mulcair refers to wanting to make the “polluter pay”, but totally fails to recognize that if big corporations are forced to pay for emissions, they’re going to pass their costs onto consumers in the form of higher prices. This will not only put the squeeze on consumers, it’s also going to put the squeeze on the jobs of those who rely on more carbon-rich inputs for their livelihoods.

Think about this: your food is brought to market on a truck which will have higher fuel costs. The price of food will rise. The independent truck driver’s profit margin will shrink as a result of higher fuel costs. And if you take the bus to the market, you’re likely going to be paying a higher fare for the same reasons.

Now, Cap & Trade supporters will argue that a carbon tax will accomplish the exact same outcomes, and if we were talking about the simple application of a consumption tax, than I would agree with them. However, that’s not what we’re talking about at all. The Green Party has for a long time now advocated for the imposition of a revenue-neutral carbon tax. The Liberals under Stephane Dion proposed a similar policy. The Liberal government of Gordon Campbell actually implemented a revenue-neutral carbon tax in British Columbia, where it remains in place today.

Revenue Neutral Carbon Pricing vs. Emissions Trading

Pricing carbon may lead to higher costs for many consumer goods. However, pricing carbon through a tax has several advantages over emissions trading. First, a tax is far more transparent, and will offer more distinct choices for consumers. Consumers who want to purchase carbon-rich goods and services will pay a premium, while those who want to purchase low-carbon goods and services will save their money.

Second, a carbon tax is predictable, and will allow businesses and industry to better plan for their own fiscal needs. The Cap & Trade scheme requires the establishment of an emissions trading exchange, similar to a stock market, run by middlemen who stand to profit from each transaction. And like a stock market, emissions trading markets will lead to fluctuating prices – sometimes wildly so. If you’re a big industrial player, you may be able to absorb price fluctuations. But if you’re a small business of the sort the NDP pretends to like to champion, you’re likely going to be less able to deal with fluctuating offset prices.

Third, a revenue-neutral carbon tax will actually put money back into the hands of hard-working families, allowing them greater control over their own spending choices. The Green Party has long championed reductions to income tax as the primary means for people to hold onto more of their own money. No other federal political party, except the Dion Liberals in 2008, ever proposed significant cuts to income tax, despite the fact that most taxpayers have expressed an interest in paying less taxes. A revenue-neutral carbon tax in conjunction with income tax reductions would lead to people having more money in their wallets and clearer choices about how they can spend it.

However, cutting income tax alone won’t put more money into everyone’s wallets, given that there is a significant percentage of Canada’s populace who do not pay income tax. To ensure that the economically less well off have the income supports needed, the Green Party has proposed the implementation of a Gauranteed Annual Income, a policy position first brought forward in Canada by Progressive Conservative Hugh Segal. Now, while that’s the Green’s policy (and one which I agree with), there would certainly be other ways to achieve similar results (such as providing those living in poverty with other forms of income supports).

Finally, one of the best advantages a revenue-neutral carbon tax has over Cap & Trade is that a revenue-neutral carbon tax will lead to actual reductions in emissions. Where Cap & Trade schemes have been implemented in Europe, it’s been unclear that they’ve actually led to a reduction in emissions. This may be because the Cap was set too high, but for whatever reason, it’s clear that carbon offset purchases may not actually lead to the desired environmental outcome.

In contrast, a carbon tax is a consumption tax. Whenever consumption taxes are imposed, there have been direct results to consumption: higher prices lead to less demand. Consumption taxes on cigarettes, for example, have led to a reduction in smoking. Consumer buying habits really can be shaped by income policy. And, new low-carbon goods and services may start to appear which are less expensive for consumers than higher-priced carbon rich products, as more room in the market is created. That’s what capitalism is all about after all: competition. It’s just that the kind of capitalism we’ve been practicing has favoured subsidies to businesses and industries which have not internalized all input costs, such as the cost of carbon emissions. The introduction of low carbon goods and services into the marketplace has been historically curtailed, due to the public assumption of pollution costs which make low carbon alternatives less competitive.

All In This Together

For me, it’s clear that if Thomas Mulcair was really concerned about wanting to make the “polluter pay”, he really doesn’t get it. Mulcair and the NDP really need to look into a mirror and acknowledge the fact that he and the NDP have seen the “Polluter” and they are Us. As long as we continue to make carbon-rich lifestyle choices, we are just as responsible as any one person or corporate entity for increasing global carbon emissions. We’re all a part of the problem, and we all need to be a part of the solution.

While the notion of taking personal responsibility for the climate crisis is something which people may be reluctant to do, the only other option will be to embrace lousy public policy, which is exactly what Mulcair and the NDP continue to endorse with their Cap & Trade proposal. Rather than recognize that we’re all in this together, the NDP wants to continue to practice its version of “left” vs. “right” political warfare, which admittedly has proven successful in garnering votes. But it fails abysmally when it comes to implementation and accomplishing desired outcomes. In other words, the NDP continues to talk a good game, but they lack on follow through.

It’s time to move away from the “left” vs. “right” dialectic which the NDP clings to. Ironically, it’s Thomas Mulcair who seems to be the NDP’s champion for reform in this leadership race (well, there’s also Nathan Cullen). Yet, Mulcair’s reforms will be to make the NDP look more like the Liberal Party, in an attempt to appeal to centrist voters. Clearly, there won’t be a shift away from the left/right dialectic under Mulcair, only potentially a shift from the NDP’s relative position on the left side of the political spectrum. Mulcair wants to nudge his party further to the right in order to get votes. I would suggest that instead a better approach would be to abandon this outdated left/right way of looking at the world in order to better get the jobs which need doing done.

For a leadership contender who claims to want to be a champion of sustainable development, a better lens for decision-making is one which doesn’t look at right vs. left, but rather which assesses impacts based on right vs. wrong. And I guess that’s one of the reasons that I joined the Green Party.

(opinions expressed in this blog are my own, and should not be interpreted as being consistent with the views of the Green Party of Canada)